The disgrace of the “Keynesian left” alternative

May 25, 2013

The oligarchy surely has no better friend than Paul Krugman, today’s intellectual leader of an ever so slightly moderated version of neo-liberalism that’s neatly packaged to the public as the “Keynesian left” alternative. Forget that there’s no resemblance to the views of the real John Maynard Keynes, himself no radical, or that the sole claim of expertise is rooted in an utterly disgraced profession, Krugman has nevertheless been anointed the critical role of sowing hope for alternatives while remaining firmly bounded within a socio-economic system in which there can be none. Ignoring the rhetoric, we find nothing truly antagonistic to Thatcher’s TINA.

This is the disgrace and hypocrisy of the so called “center-left”, an outrageously false designation given how very far it is from any reasonable notion of that true moral center we find rooted in almost all philosophical and religious traditions. We need look no further than the recent speeches of Pope Francis, who has offered views on our socio-economic system that are truly central in the moral sense and, needless to say, far to the left of today’s so-called “Keynesian center-leftists”,

Let’s look at Krugman today in a post entitled “Europe’s Keynesian Problem”. “Everyone with a bit of sense”, he informs us, knows the central problem in Europe. It has nothing to do with extreme inequality or the fact that just a handful of oligopolistic firms and banks control virtually the entire economic structure; no, it’s a far simpler case of accounting valuations. “(T)here was a sharp rise in relative costs and prices in the periphery during the boom years, and the process of correcting that overvaluation through “internal devaluation” is extremely difficult and painful.” The Krugmanian / “Keynesian” solution is for nothing beyond continued austerity in the “periphery” albeit not as extreme as today. Direct action to advance prosperity is simply not in the cards. “(N)obody is suggesting stimulus for, say, Portugal”, he asserts, bearing his neo-liberal teeth. Portugal has an unemployment rate of 17.5%, and an average wage half that of Germany coupled with longer work hours; yet while the so called “private sector” can’t come close to providing anywhere near the living standards our productive capacity clearly permits, Krugman cannot bring himself to support “stimulus”.

And what of the term “peripheral”, used here and throughout the neo-liberal world as if it were a basic, morally unobjectionable feature of nature? Should not any system of thought which accepts the notion that a group of people can be “peripheral”, i.e. not central, be branded as sitting on the extreme outer periphery of any true moral center?

Krugman then regurgitates a 21st century version of “trickle down”: “on any kind of rational pan-European basis, we should be seeing austerity in the periphery at least partly offset by stimulus in the core.” This is Krugman’s central dogma for Europe: austerity for the periphery, although less than today, coupled with inflationary spending in Germany. German spending will then trickle down to the peripheral Portuguese through the magic of the market. Yes, and we see the same market magic trickling between the United States and Mexico, do we not? The answer to the problems of the Mexicans then should be little more than a bit of stimulus in America! I wrote a post the other day on Krugman and Mexico, in fact, and his views are rooted in the same pitiful neo-liberalism as his ideas for Europe. Mexico, to Krugman, merely needs better child nutrition and education and should then wait a few decades for the medicine to work. TINA personified!

Our center-left intellectuals, almost all “economists”, are truly a disgrace. And it’s demonstrated almost daily. We need look no further today than Brad DeLong, who Krugman refers to in his post. It’s the standard left neo-liberalism that requires no further comment. What’s notable is that DeLong admits (correctly) of his own intellectual impotence, concluding that the disgraced right wing economist Kenneth Rogoff “is one of those people whose judgment is significantly more likely than not to be better than my own.”